Park Ha Biological Technology (BYAH) Registration Filing summary

Company overview and business model

• Operates as a Cayman Islands holding company with all business activities conducted through subsidiaries in China, focusing on skincare and cosmetic products under the “Park Ha” brand.

• Revenue streams include product sales and franchise fees, with a franchise model comprising regional, skin management center, and single stores across multiple Chinese provinces.

• Franchisees pay annual fees based on store type, and the company provides R&D, training, and marketing support.

• The company outsources manufacturing to third parties and leverages digital and social media marketing to drive sales and franchise growth.

Financial performance and metrics

• For the year ended October 31, 2023, revenue was $2.46 million, up 28% from $1.92 million in 2022, mainly due to increased franchise fees.

• Net income for FY2023 was $852,042, a 345% increase from $191,298 in FY2022; however, net income for the six months ended April 30, 2024, dropped 90% year-over-year to $48,900 due to a decline in franchise fees.

• Gross profit margin for FY2023 was 87%, with franchise fees accounting for 74% of revenue.

• Cash as of April 30, 2024, was $931,966, with no long-term debt and sufficient working capital for at least 12 months.

• Accounts receivable and loans to franchisees are subject to credit risk, with significant allowances for expected credit losses.

Use of proceeds and capital allocation

• Net proceeds of approximately $3.65 million (assuming $5.00 per share IPO price) will be allocated: 50% to expand directly owned stores, 20% to purchase product patents, and 30% to acquire ingredient suppliers.

• No dividends are expected in the foreseeable future; earnings will be retained to support business growth.